King’s Motors (Oxford) Ltd v Lax [1969] 3 All ER 665
Contract – Option for Renewal – Void for Uncertainty
Facts
The parties had a lease for seven years. The lease contained an option for renewal for a further term of seven years on the same terms as the existing lease, ‘at such rental as may be agreed upon by the parties. When the lessor gave notice to terminate, the lessee sought a declaration that the notice was void for uncertainty because the main provision of the agreement in the form of the rent payable was only to be agreed in the future.
Issues
Whether or not the option for renewal was void for uncertainty. Whether or not the phrase ‘at such rental as may be agreed between the parties’ was meaningless, considering the option also stated that the terms would be ‘the same’ as the existing lease and so could be disregarded.
Decision/Outcome
The option for renewal was void for uncertainty. The major part of the rental agreement in the form of the amount of rent payable could not be determined. The clause was therefore no more than an agreement to agree and was as a result unenforceable. The court was not able to imply a term suggesting that the rent be ‘reasonable’ as in Foley v Classique Coaches Ltd (1943) 2 KB 1 because in that case there had been an arbitration agreement contained within the contract which allowed a mechanism for the settlement of this issue, whereas in this instance, there was no such agreement. In these circumstances, the court was unable to uphold the renewal clause, as it was no more than a mere agreement to agree and not an enforceable contract.
Updated 19 March 2026
This case summary remains broadly accurate as a statement of the law on agreements to agree and void uncertainty in options for renewal. The principle that an option to renew ‘at such rental as may be agreed’ amounts to an unenforceable agreement to agree continues to represent good law in England and Wales.
One factual error is worth noting: the citation for Foley v Classique Coaches Ltd is given as (1943) 2 KB 1, but the correct citation is [1934] 2 KB 1. This does not affect the legal principle stated, but students should use the correct citation.
The broader legal landscape on uncertainty and agreements to agree has developed since 1969. In particular, Walford v Miles [1992] 2 AC 128 (House of Lords) confirmed that a bare agreement to negotiate in good faith is unenforceable, reinforcing the approach in King’s Motors. More recently, courts have shown some willingness to uphold agreements containing mechanisms for resolving open terms (such as expert determination or arbitration clauses), consistent with the distinction drawn in this case by reference to Foley v Classique Coaches. Students should be aware that the presence or absence of such a mechanism remains a critical factor in determining enforceability.
